The Golden Truth: JP Morgan's Grand Theft Larceny at the Expense of the Taxpayer

Wednesday, March 24, 2010

JP Morgan's Grand Theft Larceny at the Expense of the Taxpayer

JPM is cutting a deal with your Government that will enable it to receive a $1.4 billion tax refund. This refund accrued to JPM from its takeover of Washington Mutual. The bondholders of Wamu will also receive a cash rebate from Obama. Here's the news link: LINK

If you do the math, you'll find that JPM paid $1.9 billion for Wamu. This means that, with the $1.4 billion tax refund, the Taxpayers have paid for 73.6% of JPM's purchase of Wamu. It then sold off anything not of use and wrote-up the value of the toxic assets it acquired, some of which were no doubt sold to the Fed with funding that is backed by the Treasury.

Now, here's that game they played with the assets they kept. They haggled with FDIC over the value of Wamu's toxic assets in order to write them down to an unreasonably low level: "Seriously Sheila (FDIC chief dope Sheila Bair) these things are illiquid and mostly worthless." The FDIC (read: You, the Taxpayer) was stuck with the tab for the difference in value between JPM's/the Taxpayer's $1.9 billion purchase and the amount that was written off pre-purchase.

Then, with TARP and all the other trillions thrown into the system, JPM has been able to write up the rest of Wamu's assets that they haven't liquidated to the tune of $10's of billions, recognize paper income in the billions, and receive Fed funding against the marked up assets in order to fund compensation. This has been a money printing machine for JPM which has been financed by the Taxpayers.

If I took the time to go thru JPM's last 2 years of 10-Q's/10-K's, I'm sure I could quantify with some accuracy the amount of money JPM has manufactured from its "purchase" of Wamu AND the amount of money transfered directly and indirectly from Taxpayers and investors into JPM's coffers. Suffice it to say that it's in the several $10's of billions, on what is now a $500 million net investment by JPM.

Further suffice it to say that the Taxpayers are getting screwed more ways than a porno actress with 20 years of film credits. I'm sure Obama, Geithner, Bernanke, Blankfein, Dimon and Henry Paulson are accepting your expressions of gratitude.

3 comments:

HalWednesday, 24 March, 2010
This just proves you can have it both ways--write offs for taxes and mark to fantasy for book purposes.
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anliuWednesday, 24 March, 2010
Dave isn't the fed's qe program set to expire this month???
p.s. did you finish reading the posts by "another"?
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Dave in DenverWednesday, 24 March, 2010
anliu the mortgage qe ends on 3/31 - theoretically. as for Treasury QE. if you look at the primary dealer takedown of almost every Treasury auction this month, the Fed is essentially funding the PD's to take over 50% of most of the auctions. Even yesterdays' 2-yr. auction - and typically foreigners take a lot of the shorter paper issued.

I'm about 1/2-way thru "another" posts. Thanks for turning me on to that. Someone linked this blog yesterday, which I have visited in the past but had no idea it was connected to "another:"

Friend Of A Friend Of Another

http://fofoa.blogspot.com/
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Why Gold?

Gold is the world's oldest currency. You exchange your fiat currency (dollars, euros, yen, yuan) into gold as an insurance policy against catastrophic Central Bank and Government policies which serve to destroy the value of fiat currencies and destroy democracy.

Gold can ONLY be considered an investment to the extent that it remains significantly and historically undervalued in relation to the fiat currencies against which its value is measured. Otherwise it remains the world's oldest currency and is completely free from the counterparty risk associated with currency by Government fiat (i.e. fiat currencies rely on a Government's "full faith and credit.")

Quote Of The Month Courtesy of "Jesse"

Unfortunately for Larry Summers, Ben Bernanke, and their friends at the BIS, they have not yet figured out how to print physical gold, silver, and other essential commodities, and the world is reaching the point where it might simply start ignoring the New York based markets with respect to essential commodities such as basic materials, oil, foodstuffs, and the like, as they become increasingly irrelevant, fraudulent, and Orwellian. And then where will the financial engineers be, except with no more excuses and no place to hide?

Here is the link to his entire commentary, well worth a read:

http://jessescrossroadscafe.blogspot.com/2010/07/gold-daily-chart-shock-and-awe-for.html

Great Quote From Jim Rogers On Govt CPI Reporting

JR: I mean, we have inflation now. If you go to the shop, whether it’s groceries, or education or insurance or health care, prices are going up for everything. The government lies about it in the US. Some countries lie, many countries don’t: Australia, China, India and Norway. Many countries don’t lie about it and acknowledge that we have inflation. Others lie about it, the UK and the US, but if you go shopping you know prices are up.

Q: Are you saying that the American Consumer Price Index (CPI) published by the US Bureau of Labor Statistics is a lie?

JR: In my opinion, yes, of course it is. Have you looked at it? They’ve changed their accounting several times in the past few decades. When housing was 20% to 25% of the CPI and housing was going up, they didn’t count it, saying rents weren’t going up, and then when home prices started going down, they counted it. It’s the same with many things. It’s staggering some of the tortuous reasoning that the BLS has used over the past 25 or 30 years. When the price of gasoline goes up, they say it’s not really going up because it’s better gasoline, better quality, therefore you’re getting more for your money. I mean, it’s endless, the stuff that they say and for some reason people sit there, although more and more people are catching on, and accept what the government says.

source: www.clusterstock.com

Quote of the Week

"The primary function of a Central Bank is to engage in the massive transfer of wealth from the middle class to the wealthy elite. The Federal Reserve was set up to do this with the blessing and support of Congress." - Dave in Denver

If you refuse to believe the above, please read "The Creature From Jekyll Island: A Second Look at the Federal Reserve" by G. Edward Griffin and then explain to me why the Senate voted down the Vitter Amendment and Congress refuses to pass a law requiring a full audit of the Fed, even though the Fed is using taxpayer-backed money to bailout Wall Street and Europe.